Land Reform - success and failure

If a land reform programme is to succeed it must be radical and far reaching. And those who receive the land must continue to receive active support to help them take advantage of it. Here we look at these principles in two major land reforms - the success of South Korea and the relative failure of Peru.

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South Korea ——-

ROY LAISHLEY argues that a great deal of South Korea’s success is based on circumstances so unusual that they seem unlikely to appear elsewhere. And he points out that the influence of South Korea’s industrial development could be putting the reform at risk.

A far reaching land reform carried out between 1948 and 1957 left South Korea with a rural society more equal, more productive and more generally prosperous than any other non­communist developing country in Asia. From an acute dependence on rice imports, it is now self-sufficient.

Landless labourers account for only three per cent of the rural workforce and agricultural production has been growing steadily, in contrast to stagnation in India and a decline in Bangladesh.

Between 1970 and 1975, real rural incomes increased by nearly 50 per cent. South Korea is now being put forward as a model for rural development. But how have its considerable achievements been reached?

The pattern of land ownership was radically re-designed at the end of the Second World War. Afraid of a communist takeover, the American administration and then the puppet government of Syngman Rhee simply handed over the land to the occupying tenants.

The shift was revolutionary. More than half of all land changed hands and the level of compensation was low. This resulted, according to one writer, in an 80 per cent decline in the income of the top four per cent of the population and a 20-30 per cent increase in income for the bottom 80 per cent.

Yet, despite the scope of the reform, the level of agricultural production was hardly affected. The reform handed ownership to the existing tenants, not to new and inexperienced farmers.

The average Korean farmer uses little in the way of new technology; on small plots his farming is heavily labour­intensive. But he uses five times as much fertiliser as his Malaysian counterpart and twenty times that used by the average Indian farmer. Half the fertiliser is supplied directly by the government, along with other inputs and credit.

Indeed, South Korea’s rural development has been largely a product of government direction. Though inequalities are creeping back into rural society, the government has retained a basic equality by strictly controlling land transactions and rigidly enforcing the ceiling on holdings.

South Korea’s battle to raise the standard of living in rural areas has also been incalculably aided by unique population trends. Since 1960, its rural population has been steadily declining; from 14.5 million in 1960 to 13 million in 1975. This was despite a national population growth rate of around two per cent.

The main reason for this has been a heavy migration to the cities to work in South Korea’s fast-growing industries. Generally whole families sold up their farms and moved on leaving their farms usually small - to be bought up by other small farmers. Again, this has helped to maintain the basic equality of Korea’s rural society.

Is Korea’s case a blue-print for other countries? It would seem not.

Korea’s rural development was born in exceptional circumstances. An occupying American army which could - and largely did - remove the economic power-base of a ruling class and transfer land, in roughly equal portions, to a new class of peasant farmers. Few governments have the political means or the will to undertake such a complete transfer of property and power. And anything less complete, as the cases of India, the Philippines or Egypt suggest, eventually permits the old patterns or power and inequality to survive.

The lack of landless peasants and of a large export crop sector have also been vital in South Korea’s success story. And a falling rural population has enabled government schemes to succeed. Few developing countries have these advantages.

But if basic equality is one necessary precondition for successful rural development, the constant need for government intervention to maintain that equality is another lesson, to be learnt. South Korea’s rural development has a flavour of collectivist agriculture, which contrasts strongly and is increasingly at odds with the rampant capitalism of the industrial sector.

This tension is now showing - the government is coming under increasing pressure to ease its control on land ceiling and on land transfers. Attractive food prices inevitably favour larger farmers in a better position to respond to price incentives and income inequalities appear to be slowly increasing. In the 1950’s only eight per cent of farmers were tenants; now 15 per cent are. Holdings over three hectares are growing in number.

The answer could ultimately depend on Korea’s rural population. If it starts to expand, and a limit is reached on land productivity, then the system of private farms may well have to be replaced by a more communal system of production. Can a capitalist system adapt to this need and still ensure enough for all? That just might happen in prosperous rural South Korea.

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Peru ——-

DAVID WILSON traces the steps of Peruvian land reform, which are largely a response to peasant unrest. But the reform has not gone far enough to contain it,and those who have received new land have had little subsequent backing.

The late 1950s and early 1960s witnessed a massive upsurge in rural unrest in highland Peru.

A total of 103 land invasions, rent strikes and related forms of anti-landlord mobilization were reported in the Lima press. And countless other incidents went unrecorded - but not unnoticed - in the luxurious suburbs of Miraflores and other fashionable districts of the Peruvian capital.

The peasantry were beginning to enjoy more success in their centuries-old struggle against the highland landowners. To be sure, they still got their skulls broken and on occasions were shot down in cold blood, but it was becoming harder to dislodge them from the lands they hadinvaded.

Confronted with this, Peru’s major political parties incorporated some commitment to land distribution in their manifestos for the 1963 presidential election.

A centre-right coalition emerged victorious at the polls, and in 1964 Agrarian Reform Law 15037 was passed. The most profitable parts of coastal and sierran agriculture (the heavily capitalized sugar estates, for example) were to be left untouched on grounds of ,efficiency’; while less productive lands which generated low profits would be redistributed on an individual basis to peasant smallholders.

For a variety of reasons, the reform was only slowly implemented, and little. progress had been made when Belaunde’s incompetent government was toppled by a military coup led by General Juan Velasco in October 1968.

Occupying a key role in the new development strategy was the introduction of an ‘authentic’ land reform. So in June 1969 the Velasco government promulgated its Agrarian Reform Law 17716.

A main objective was to increase rural productivity by freeing peasants from landlords. The ex-landowners would then, it was hoped, invest in the towns. It was also hoped of course that rural unrest would be damped down. This was Peru’s first sustained attempt to restructure agriculture along stable capitalist lines. As such, one could have expected that the Velasco government’s land reform programme would have attracted wide support from Peruvian industrialists.

But this was not to be, mainly because its proposals were far more sweeping than the nation’s ruling class wished, and the land reform met with vociferous opposition from the outset.

From 1970 a strong campaign was conducted in the ‘free’ press, orchestrated by Peru’s most important landowners. For tactical reasons they presented a low profile (having little popular support) and left the task of openly publicizing the rights of landlords to the farmers of small and medium-sized properties of under one hundred hectares.

Indeed one reason why the Association of Small and Medium Property Owners gained in strength over the period 1970-73 was that they stood to lose everything through expropriation. The owners of large estates had long been investing capital in industry and commerce, and would not be so hard hit by takeover.

After tolerating this campaign for over three years, in mid-1974 the military
nationalized Peru’s so called ‘free’ press (it was in fact closely controlled by a few of the country’s richest families) banned the landowners organisations and pressed on with the takeover of estates with renewed vigour.

This action was partly a response to the protests of the rural poor. September 1972 saw large scale land invasions in Piura by rural workers, who also occupied the rice mills. In some cases, land that had already entered the agrarian reform process was also invaded and as a result the military were forced to reduce the maximum size of unexpropriable land on the coast from 40 to 12 hectares.

1974 saw land invasions on a massive scale, involving the forced take-over of 78 haciendas and the mobilization of more than 30,000 peasants throughout the sierran department of Andahuaylas.

Although actions such as these forced the government’s hand, land redistribution as a whole still proceeded slowly, giving most of the old landowners time to strip estates of cattle, machinery and woodlands.

This greatly hindered the ability of the newly formed cooperatives to begin functioning on a sound basis. Very few cooperatives outside the coastal region have been able to reach their former levels of output and productivity.

This situation has not been helped by the continuance of established patterns for the allocation of credit to the rural sector.

The majority still goes to the more prosperous coastal areas rather than to the poorer areas inland. The result is that many cooperatives in the highlands are in danger of collapse, and the rural incomes in this region have not risen over the last decade.

In addition, more than 700,000 small farmers have been by-passed by the land reform legislation, the great majority of them living on miserable allotments of under three hectares in the sierra. So too have the seasonal landless labourers, who comprise 25 per cent of the rural labour force on the coast. All in all, the land reform has only benefitted approximately one third of the rural population.

Under these circumstances, the government has been unable to achieve one of its key policy objectives; a dampening of rural unrest.

Over the first six months of this year, a new wave of land invasions has taken place in Cuzco and Puno departments, the areas where the peasant movement began after 1959. So a full circle has been turned, the land reform card has been played, and still there is no solution to Peru’s rural crisis.

David Wilson is an academic, specialising in agrarian reform.Roy Laishley works for Development Press Services in London.

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